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Asia stocks badly shaken by Wall Street's correction

HONG KONG: Share prices tumbled across Asia on Wednesday as investors spooked by Wall Street's nose-dive sold down the high-tech stocks which had driven regional bourses to record highs over the holiday season.

Dealers said confidence in Asian markets was badly shaken by the Nasdaq composite's worst single day point loss on Tuesday.

The tech-heavy index dropped 229.46 points or 5.55 percent to close at 3,901.69, while the Dow Jones Industrial Average dropped 359.58 points, or 3.16 percent, to 10,997.93, its forth-worst point drop in a single day.

In Hong Kong, which took the heaviest fall with a 7.8 percent decline in the morning session, Financial Secretary Donald Tsang appealed for calm and said a correction was inevitable after a stunning year-end rally.

"We understand that it is part of the global adjustments taking place in the stock market, starting in America, spreading through Europe and eventually coming here in East Asia," he said.

With memories of the crippling two-year financial crisis still fresh in investors minds, Tsang said while losses were sharp, there was no sign of a meltdown.

"The whole conduct was entirely orderly. Our regulatory bodies are in full alert," he said, as the key Hang Seng Index lost a massive 1,333.77 points to 15,739.05.

Geoff Galbraith, deputy head of institutional sales at Dao Heng Securities in Hong Kong, said he was not surprised by the profit-taking.

"We had a big run-up in the market... You just can't go up in a straight line," he said.

Other dealers said it was too early to tell whether the plunge marked an end to the clamour for technology stocks.

"It is difficult to tell with a one-day movement... there is still a lot of interest out there," said Franklin Kam, broker at Paribas Asia Equity.

With concerns about the millennium computer bug all but forgotten after a trouble-free start to 2000, IT-related and high-tech issues were expected to spur trade in the region on to new highs in coming months.

Instead, interest rate fears replaced Y2K glitches as a cause for disquiet, wreaking havoc on European and US markets on Tuesday.

In Singapore, the benchmark Straits Times Index fell 156.48 points or 6.2 percent to 2,373.67 in the morning session Ñ its biggest single day drop since the index was introduced in August 1998.

"People are off-loading before it is too late, especially with increasing prospects that the Dow Jones would go lower today," said IDEAglobal.com analyst Christie Tan.

Malaysian share prices fell 2.6 percent in morning trade. "The thing is whether the correction in New York will continue or if it will just descend into a crash," said an institutional dealer with a local brokerage.

South Korean share prices plunged a whopping 6.9 percent as weakness on regional bourses sapped sentiment.

"The market will, however, recover its steep falls soon as the optimistic view for the mid-and long-term market prospects is shared by all players," an analyst with Samsung Securities said.

Australian share prices fell sharply, down 2.3 percent, while New Zealand stocks fell 2.4 percent at the close.

Thai stocks plunged nearly six percent in the morning, but dealers were hopeful the drop was merely a short-term correction.

In India as well, brokers said they expected a moderate recovery by the end of the day once the panic subsided and buying support came in.

Share prices on the Bombay Stock Exchange (BSE) fell more than five percent in early trade.

The Philippine stock market closed 3.6 percent lower, with losses worsened by profit-taking from a strong rally staged late last year.ÑAFP